Will merge listed co with unlisted one: Saint-Gobain

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On May 18, Saint-Gobain Sekurit India Ltd announced that the promoters – Saint Gobain Glass India Ltd and French parent firm Saint-Gobain Securit SA France had decided to delist the company from the Bombay Stock Exchange (BSE). The promoters agreed to buy back the publicly held shares of the company, which constitutes 14.23% of the total equity capital of the company. The promoters also mentioned that the offer price will not be more than Rs 31 per equity share.

 

On the line from Chennai, Managing Director and Founder of Saint Gobain Glass India, Mr. B Santhanam says that it makes sense for Saint Gobain Glass India and Saint Gobain Sekurit to merge because a lot of businesses are similar.

 

Below is a verbatim transcript of B Santhanams interview with CNBC-Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: I believe that the promoters are talking about a offer price of not more than Rs 31 share, will that work out given that the current market price is Rs 42?

A: We have to wait and see.

 

Q: You wont consider a flexible pricing for the delisting process?

 

A: At the moment, we havent taken a call on that. I think that we have just sent it for shareholder approval and it will take us a few weeks to understand how its going to develop. We hold 86% equity; 14% is with the public at this point in time. Also, just to correct a misunderstanding, the company that bought Sezal float glass business is not Saint Gobain Sekurit, it is Saint Gobain Glass India, which is not a listed company in India.

 

Also read:

Sezal Glass sells float glass business to Saint-Gobain

 

 

Q: Can you give us a sense of shareholding pattern for that 14%. We are just trying to understand whether there are any institutional investors as well with whom you have held dialogue about this delisting process?

A: We havent held any dialogue. To the best of our knowledge, we dont have any large institutional holding in that 14%.

 

Q: Why is it that you are choosing to delist the company?

A: In India, the primary business that we have is through Saint Gobain Glass India which is an unlisted company and thats really where all the investments have been made, and we have 86% in this company. We believe that it makes eminent sense for us to merge these two companies under Saint Gobain Glass India umbrella because a lot of the businesses are similar and there is a lot of synergy in that. So we felt that it makes sense for us to delist.

 

Q: What is the process that you will follow for this delisting?

A: We have sent it for shareholder approval and once we get the approval from the shareholders, which is that 2 out of 3 shareholders have to say yes, then we will go through the book building process and then take a call at that point in time. By the way, this company reports to me, but I am not in the board of this company.

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